a b c d e f g h i j k l m n o p q r s t u v w y z search

TeachMeFinance.com - explain present value cost present value cost -- the cost in currently valued dollars of funds to be expended over a period of time, usually a number of years, less the net of any funds to be repaid. It is adjusted to compensate for the loss or gain of the opportunity to invest the funds rather than spend them -- that is, compensate for the dollars' estimated earning potential in alternative uses. For example, the present value cost is reduced by the amount of income the funds are expected to earn until they are disbursed and increased to compensate for the loss of earnings thereafter, or until such time as the funds are repaid. Present value cost is used by federal regulators to estimate the impact on the thrift insurance fund of alternative solutions to troubled thrift institutions. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.